Red State Energy, Red State Jobs
Posted on November 29, 2011
All-of-the-above is officially the mantra for Republicans when it comes to energy security.
Republicans understand that electricity generation is extraordinarily important to American progress. Without electricity, we can’t play with our iPads, air condition our homes, cook our breakfasts, watch television, get money from the ATM, shop for food, or do just about anything else we need to do on an hourly basis.
It was Benjamin Franklin who first discovered electricity and ever since that time, we have harnessed its power to improve our daily lives.
We manufacture electricity in many different ways in this country. We split atoms to create nuclear energy. We burn coal and natural gas. We build damns that generate power through water. We use energy from the sun. We harness the wind.
Some of these strategies are cleaner than others. Nuclear has no emissions, but leaves toxic waste. Coal mining is dirty, and coal burning pollutes the air (no matter how much the ad campaigns talk about clean coal). Natural gas burns cleaner, but shale fracking requires the use of tons of water, and there are questions about its environmental effects. Solar power, of course, is very clean, but not very predictable. The same can be said for wind power. The wind doesn’t always blow, after all.
We use a mix of strategies because we need them all. Electricity consumption is only going to increase in the next fifty years. And if we don’t keep pace with consumption by increasing production in every bucket, we are going to be in big trouble.
Republicans understand this, which is why they have pushed an all-of-the-above strategy. They have pushed a balanced approach that includes investments in renewables while allowing more exploration for natural gas and greater permitting for coal mining.
This all-of-the-above strategy, however, is under attack. Some folks are making noise that we should stop incentives that increase investment in renewables. With the collapse of Solyndra, these critics are saying that all incentives aimed at renewable energy are somehow bad for the marketplace and bad for taxpayers.
Much of this criticism, aimed at the political decisions of the Obama White House, is valid. But an overall indictment of renewable energy is unwise and counter-productive. Republicans who want to throw the baby out with the bath water need to be very careful in whose hide they are skinning. They could be attacking their own constituents.
This is especially the case with wind power. Most of the major wind farms are housed in red states, Texas being the best example. In fact, Texas is the biggest producer of wind energy in the United States, and plenty of right-wing conservative ranchers are making a good living leasing their property to utilities as wind farms.
For many of these ranchers, wind is a better bet than natural gas fracking. Wind doesn’t take any water to generate energy, and water is the life-blood of the ranching business.
Wind energy is not a fly by night operation. Huge companies, like BP, GE and Next Era Energy have invested billions of dollars in wind as a clean alternative. And these American companies are in a battle with the Chinese to lead the world in this field.
The U.S. Congress has played a positive role in the development of wind energy. For several years now, on a bipartisan basis, they have put incentives in the tax code to help develop wind energy. The production tax credit (PTC) gives both small and big businesses a tax credit for generating renewable energy sources, including wind. The tax credit for wind is 2.1 cents per kilowatt hour and is earned for a period of 10 years from when a renewable facility is placed in service. The PTC is set to expire and will not be available to facilities placed in service after December 31, 2012.
Some say that this is meddling in the marketplace, and for sure, there is a difference between all-of-the-above and survival of the fittest. If the PTC is allowed to expire, investment in wind power will dry up.
Many utilities have already scaled back production in the expectation that the PTC will not be extended.
That could mean the loss of 75,000 jobs directly related to the maintenance of these facilities, and countless others that are indirectly related. The bulk of these jobs are, once again, in red states.
Many conservative governors understand the stakes and are pushing for the extension of the PTC. Such stalwarts of the right like Sam Brownback, the Kansas Governor, and Terry Branstad, the Iowa Governor, signed onto to a letter that urged the quick adoption of a PTC extension. “Although tax credits for wind have long enjoyed bipartisan support, they are scheduled to expire next year. Wind-related manufacturing will slow if the credits are not extended, and some the tax credit’s benefit will be lost if Congress pursues a last minute strategy.”
This is not an idle threat. If this incentive is not in place, the American wind industry will be blown away. And in thirty years, when we are wondering why we have to rely on the Chinese for the latest in wind technology, we can thank short-sighted policy makers for that development.
Extension of the PTC doesn’t cost the Treasury much and in fact, the small investment will be paid back over the long-term. This tax credit is not a loan program. Companies only get it when they produce real energy, so in many ways, it is not much of a gamble by the taxpayers. It is, though, a smart and proper investment in a real all-of-the-above strategy.
The market is imperfect and sometimes government can play a role in incentivizing positive action that will help make America a better place to live. Extending the production tax credit is but one example of that.